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The sources of the evolution of China's provincial economic gap: A green economic growth accounting perspective

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  • Yang, Wenju
  • Long, Ruiyun

Abstract

The inter-provincial economic gap in China is obvious and tends to expand, although it is still unclear why this occurs. This paper combines DEA-based green economic growth accounting, growth convergence test and distribution dynamic analysis to show that China's inter-provincial labor productivity demonstrated significant growth convergence between 1997 and 2016, while it was significantly promoted by capital deepening and obviously inhibited by technological progress and human capital accumulation, and the effect of technological efficiency change remained unclear. In addition, the gap of labor productivity level in China's provinces widened significantly, which can be largely attributed to the combined effects of technological progress and capital deepening. The economic growth accounting analysis ignoring Energy and environmental factors tends to overestimate the relative contribution of factor accumulation and underestimate that of TFP changes, while ignoring human capital will lead to opposite biased results, but both of which do not change the qualitative conclusions mentioned above.

Suggested Citation

  • Yang, Wenju & Long, Ruiyun, 2020. "The sources of the evolution of China's provincial economic gap: A green economic growth accounting perspective," Economics Discussion Papers 2020-3, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwedp:20203
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    References listed on IDEAS

    as
    1. Quah, Danny, 1997. "Empirics for growth and distribution," LSE Research Online Documents on Economics 2138, London School of Economics and Political Science, LSE Library.
    2. Danny Quah, 1997. "Empirics for Growth and Distribution," CEP Discussion Papers dp0324, Centre for Economic Performance, LSE.
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    More about this item

    Keywords

    counterfactual analysis; distribution dynamic analysis; green economic growth accounting; multimodal test; non-parametric test;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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